Fifth Third Bancorp v. Dudenhoeffer
| Fifth Third Bancorp v. Dudenhoeffer | |
|---|---|
 | |
| Argued 2 April, 2014 Decided 25 June, 2014 | |
| Full case name | Fifth Third Bancorp v. Dudenhoeffer |
| Docket no. | 12-751 |
| Citations | 573 U.S. ___ (more) 134 S. Ct. 2459; 189 L. Ed. 2d 457 |
| Court membership | |
| |
| Case opinion | |
| Majority | Breyer, joined by unanimous |
| Laws applied | |
| Employee Retirement Income Security Act of 1974 | |
Fifth Third Bancorp v. Dudenhoeffer, 573 U.S. ___ (2014), was a United States Supreme Court case in which the court found ESOP fiduciaries have the same prudential duties as non-ESOP fiduciaries, as set by ERISA, except that they are not required to diversify their investments beyond shares of the employer's stock.[1][2]
Background
Fifth Third Bancorp, a large financial services company, maintained a defined contribution retirement plan (specifically an Employee stock ownership (ESOP)) for its employees. In September of 2009, a group of its former employees and current ESOP participants file a class action lawsuit against Fifth Third and its corporate officers, alleging that they violated their ERISA-mandated fiduciary duty under ERISA. Specifically, the employees alleged that Fifth Third and its officers should have known that Fifth Third's stock was overvalued. Per the complaint, the stock was overvalued due to the firm's involvement in risky subprime lending and that officers had made material misstatements about the company's financial prospects to inflate the value of the company's stock. The employees alleged that a prudent fiduciary acting in good faith stewards of the ESOP's assets should have taken steps to address this overvaluation or protect the plan participants from the risks. Instead, they continued to buy and hold Fifth Third stock until the market crashed in July 2007, wiping out over 3/4ths of the company's stock.
The complaint was initially dismissed by the Federal District Court of Ohio.
References
- ^ "Fifth Third Bancorp v. Dudenhoeffer". Oyez. 30 September 2017. Retrieved 30 September 2017.
- ^ "Fifth Third Bancorp v. Dudenhoeffer". SCOTUS Blog. Retrieved 30 September 2017.
External links
- Text of Fifth Third Bancorp v. Dudenhoeffer, 573 U.S. ___ (2014) is available from: Justia Oyez (oral argument audio) Supreme Court (slip opinion)
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